Stevens Institute of Technology: Suit Claims Attorney General’s Ultimatums Overstep Legal Authority

HOBOKEN, N.J. — New Jersey’s Attorney General is overstepping her authority by questioning the manner in which an experienced board of trustees of a private university administered a portion of its endowment funds, according to a lawsuit filed today by the Stevens Institute of Technology.

The lawsuit asserts that NJ Attorney General Anne Milgram has improperly attempted to impose her business judgment on the university’s board and administration with a list of non-negotiable demands under a unilateral two-week deadline to the Stevens board -- all of which were unanimously rejected by the board which questioned her authority to do so in the lawsuit filed in Hudson County Superior Court.

The university today also announced that it had retained former New Jersey State Supreme Court Justice James R. Zazzali as an impartial fact-finder to assist a subcommittee of the board to review the reforms that have been put into place in recent years and to suggest any improvements that may be advisable.

The board of trustees of Stevens Institute of Technology includes 21 men and women who are accomplished professionals, business executives and educators, several of whom sit on the boards of leading corporations, international organizations and non-profits.

The trustees said Attorney General Milgram’s ultimatums were outlined at a meeting with them earlier this month. The points were generally based on factual misunderstandings and misleading and erroneous interpretations of past matters, which ranged from the administration of a portion of the Stevens endowment to operational management at the private university.

Among the attorney general’s demands were that Stevens refrain, in perpetuity, from expending the appreciation in a portion of its endowment funds. To that end, the lawsuit specifically asks the court for a declaration that appreciation in those endowment funds can be expended if the Board in the future chooses to do so.

Despite clear statutory authority to do so, under the Uniform Management of Institutional Funds Act and the Uniform Prudent Management of Institutional Funds Act, Stevens has refrained from spending any appreciation in that portion of its endowment fund which is at issue in the suit.

Virtually all of the matters raised by the attorney general were brought to the board’s attention in past years, trustees said, and they have been or are in the process of being resolved. To ensure that all items are fully addressed, a newly-formed committee of the board of trustees today retained as an impartial fact-finder retired New Jersey Supreme Court Chief Justice James R. Zazzali. Zazzali previously served as New Jersey Attorney General.

Attorneys said the trustees were, “universally appalled by the non-negotiable demands, the threats of public disclosure if they did not comply within days, and the government trying to impose its business views over those who serve on many other boards.”

“It is the board’s view that relenting to these demands would cause irreparable financial and reputational harm to the 140-year institution,” according to the university’s attorneys.

In the past twenty years, Stevens has secured an international reputation for excellence in engineering, research and technology. Among Stevens' accomplishments:

Undergraduate and graduate enrollment has more than doubled in the past two decades. In 1988, Stevens had about 2,700 students; today it has more than 5,700 undergraduate and graduate students and doctoral candidates.

• The number of undergraduate majors and graduate programs has grown from 50 in 1988 to 93 today.
• Faculty publications have nearly quadrupled, active research projects funded by the National Science Foundation have grown from 10 in 1988 to 37 in 2008 and externally funded research has grown from $5.1 million in 1988 to $28 million in 2008.
• In 2008, Stevens was named the Eastern Collegiate Athletics Conference, “Jostens Institution of the Year,” identifying Stevens as the university that best exemplifies the highest standards of collegiate academic and athletic performance. Stevens beat out 351 NCAA Division I, II and III universities in the eastern US to win this designation.
• Both the US Department of Homeland Security and the US Department of Defense named Stevens as a “National Center of Excellence” in the areas of US port security and systems engineering.
• US News and World Report has regularly ranked Stevens among the top 100 colleges and universities in America. Forbes called Stevens, “the university that knows how to get serious returns on its research and development.” Business Week focused on Stevens’ strong entrepreneurial environment in its article, “Who Needs the Ivies.”

A copy of the complaint can be seen at: http://www.winningstrat.com/pdf/stevens.pdf

About Stevens Institute of Technology

Founded in 1870, Stevens Institute of Technology is one of the leading technological universities in the world dedicated to learning and research. Through its broad-based curricula, nurturing of creative inventiveness, and cross disciplinary research, the Institute is at the forefront of global challenges in engineering, science, and technology management. Partnerships and collaboration between, and among, business, industry, government and other universities contribute to the enriched environment of the Institute. A new model for technology commercialization in academe, known as Technogenesis®, involves external partners in launching business enterprises to create broad opportunities and shared value.

Stevens offers baccalaureates, master’s and doctoral degrees in engineering, science, computer science and management, in addition to a baccalaureate degree in the humanities and liberal arts, and in business and technology. The university has a total enrollment of 2,150 undergraduate and 3,500 graduate students, with about 250 full-time faculty. Stevens’ graduate programs have attracted international participation from China, India, Southeast Asia, Europe and Latin America. Additional information may be obtained from its web page at www.stevens.edu.  

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